It has been two months now since VALOR had the opportunity to engage farmers and leaders during an agricultural trip to Argentina. The production cycle is in reverse as compared to the United States cropping systems. The crops that we viewed should be harvested as we in the United States plant new ones. While there, it wasn’t just the cropping sequence that was different, it was the language, customs and the most intriguing to me was their national agricultural policy that appeared in reverse to our agriculture policy in the U.S.
I will not soon forget our meetings with producers and their families and the rural experience brought by their hospitality and dining events at ranches and farm venues. It was clear during the various stops along our tour that there was a strain between Argentine policy and its agricultural industry. In the United States production is encouraged in policy to provide an inexpensive food source while protecting farm income, compared to the Argentina government which raises export taxes and sets export quotas. This market interference is promoted by Argentine politicians as “protecting the food tables” of Argentine consumers. The result has discouraged farmers from planting certain crops or maximizing yields in general. It appears that high ranking government officials are the only ones that are confused with the need to produce and export freely to encourage economic growth for a country largely dependent on agricultural production.
According to an article published by The Associated Press Thursday, January 30, 2014, for several years Argentina has enjoyed annual growth of 7 percent fueled by the high prices foreigners paid for the country’s soybeans and other agricultural commodities. But now, Argentina suffers from a shortage of dollars, one of the world’s highest inflation rates and an inability to tap into global credit markets because of its debt default.
Argentina’s economy this year is expected to expand by no more than 1.5 percent, mainly because of lower commodity prices and waning demand from China for its agricultural goods. The government’s policy of nationalizing private firms has also spooked investors. In addition, the threat of poor yields or drought could force the country into recession due to the government’s dependency on agriculture and the related government policies. Argentina will continue to face challenges until producers and policy makers can come to a mutual agreement of what’s best for both.
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